The PNC Financial Services Group, Inc. (PNC) 8-K Fourth Quarter and Full Year 2014

The PNC Financial Services Group, Inc.

Fourth Quarter and Full Year 2014

Earnings Conference Call

January 16, 2015

Exhibit 99.2

2

Cautionary Statement Regarding Forward-Looking

Information and Adjusted Information

Our

earnings

conference

call

presentation

includes

“snapshot”

information

about

PNC

used

by

way

of

illustration.

It

is

not

intended

as

a

full

business

or

financial

review

and

should

be

viewed

in

the

context

of

all

of

the

information

made

available

by

PNC

in

its

SEC

filings.

The

presentation

also

contains

forward-looking

statements

regarding

our

outlook

for

earnings,

revenues,

expenses,

capital

and

liquidity

levels

and

ratios,

asset

levels,

asset

quality,

financial

position,

and

other

matters

regarding

or

affecting

PNC

and

its

future

business

and

operations.

Forward-looking

statements

are

necessarily

subject

to

numerous

assumptions,

risks

and

uncertainties,

which

change

over

time.

The

forward-looking

statements

in

this

presentation

are

qualified

by

the

factors

affecting

forward-looking

statements

identified

in

the

more

detailed

Cautionary

Statement

included

in

the

Appendix,

which

is

included

in

the

version

of

the

presentation

materials

posted

on

our

corporate

website

at

www.pnc.com/investorevents,

and

in

our

SEC

filings.

We

provide

greater

detail

regarding

these

as

well

as

other

factors

in

our

2013

Form

10-K

and

our

2014

Form

10-Qs,

including

in

the

Risk

Factors

and

Risk

Management

sections

and

in

the

Legal

Proceedings

and

Commitments

and

Guarantees

Notes

of

the

Notes

To

Consolidated

Financial

Statements

in

those

reports,

and

in

our

subsequent

SEC

filings.

Our

forward-looking

statements

may

also

be

subject

to

other

risks

and

uncertainties,

including

those

we

may

discuss

in

this

presentation

or

in

our

SEC

filings,

accessible

on

the

SEC’s

website

at

www.sec.gov

and

on

PNC’s

corporate

website

at

www.pnc.com/secfilings.

We

have

included

web

addresses

in

this

presentation

as

inactive

textual

references

only.

Information

on

those

websites

is

not

part

of

this

presentation.

Future

events

or

circumstances

may

change

our

outlook

and

may

also

affect

the

nature

of

the

assumptions,

risks

and

uncertainties

to

which

our

forward-looking

statements

are

subject.

Forward-looking

statements

in

this

presentation

speak

only

as

of

the

date

of

this

presentation.

We

do

not

assume

any

duty

and

do

not

undertake

to

update

those

statements.

Actual

results

or

future

events

could

differ,

possibly

materially,

from

those

anticipated

in

forward-looking

statements,

as

well

as

from

historical

performance.

In

this

presentation,

we

may

sometimes

refer

to

adjusted

results

to

help

illustrate

the

impact

of

certain

types

of

items.

This

information

supplements

our

results

as

reported

in

accordance

with

GAAP

and

should

not

be

viewed

in

isolation

from,

or

as

a

substitute

for,

our

GAAP

results.

We

believe

that

this

additional

information

and

the

reconciliations

we

provide

may

be

useful

to

investors,

analysts,

regulators

and

others

to

help

evaluate

the

impact

of

these

respective

items

on

our

operations.

We

may

also

provide

information

on

the

components

of

total

net

interest

income

(purchase

accounting

accretion

and

the

remainder,

which

we

refer

to

as

core

net

interest

income),

on

the

impact

of

purchase

accounting

accretion

on

net

interest

margin

(core

net

interest

margin

being

net

interest

margin

less

(annualized

purchase

accounting

accretion

divided

by

average

interest-earning

assets)),

on

pretax

pre-provision

earnings

(total

revenue

less

noninterest

expense),

and

on

tangible

book

value

per

common

share

(calculated

based

on

tangible

common

shareholders’

equity

(common

shareholders’

equity

less

goodwill

and

other

intangible

assets,

other

than

servicing

rights,

net

of

deferred

tax

liabilities

on

such

intangible

assets)

divided

by

period-end

common

shares

outstanding).

Where

applicable,

we

provide

GAAP

reconciliations

for

such

additional

information,

including

in

the

slides,

the

Appendix

and/or

other

slides

and

materials

on

our

corporate

website

at

www.pnc.com/investorevents

and

in

our

SEC

filings.

In

certain

discussions,

we

may

also

provide

information

on

yields

and

margins

for

all

interest-earning

assets

calculated

using

net

interest

income

on

a

taxable-equivalent

basis

by

increasing

the

interest

income

earned

on

tax-

exempt

assets

to

make

it

fully

equivalent

to

interest

income

earned

on

taxable

investments.

We

believe

this

adjustment

may

be

useful

when

comparing

yields

and

margins

for

all

earning

assets.

We

may

also

use

annualized,

pro

forma,

estimated

or

third

party

numbers

for

illustrative

or

comparative

purposes

only.

These

may

not

reflect

actual

results.

This

presentation

may

also

include

discussion

of

other

non-GAAP

financial

measures,

which,

to

the

extent

not

so

qualified

therein

or

in

the

Appendix,

is

qualified

by

GAAP

reconciliation

information

available

on

our

corporate

website

at

www.pnc.com

under

“About

Us–Investor

Relations,”

which

may

include

materials

from

investor

presentations

or

in

our

annual,

quarterly

or

current

reports.

3

Successful 2014 Achievements

Grew loans, deposits, fee income and capital

Continued progress on strategic priorities

–

Fee income grew 4% vs FY13

(1)

Controlled expenses: noninterest expense decreased 2% vs FY13

Effectively managed overall credit quality

Strong Basel III capital position

–

Pro forma fully phased-in Basel III common equity Tier 1 capital ratio of 10.0%

(2)

–

Capital actions

FY14 financial

summary

Net income

Diluted EPS from

net income

Return on average

assets

$4.2 billion

$7.30

1.28%

(1)

See

Reconcilement

section

of

the

Appendix.

(2)

Estimated

as

of

December

31,

2014.

For

4Q14,

the

resulting

fully

phased-in

Basel

III

common

equity

Tier

1

capital

ratio

was

calculated

based

on

standardized

approach

RWAs

and

rules.

See

Estimated

Transitional

Basel

III

and

Pro

forma

Fully

Phased-In

Basel

III

Common

Equity

Tier

1

Capital

Ratios

and

related

information

in

the

Appendix

for

further

details.

(3)

Repurchased

under

our

2014

capital

plan

authorization

of

up

to

$1.5

billion

of

common

stock

for

four

quarter

period

2Q14

through

1Q15.

Ability

to

purchase

full

amount

is

subject

to

factors

such

as

market

and

general

economic

conditions,

economic

capital

and

regulatory

capital

conditions,

alternative

uses

of

capital,

regulatory

and

contractual

limitations,

issuances

related

to

employee

benefit

plans

and

the

potential

impact

on

credit

ratings.

Repurchased

12.9

million

common

shares

for

$1.1

billion

(3)

Increased

common

stock

dividend

by

9%

to

$1.88

4

Higher Commercial Loans, Deposits and Liquidity

Average loans increased $3.1

billion 

–

Total Commercial grew $3.3

billion

–

Total Consumer declined $.2

billion

Average deposits grew $5.6 billion

Spot loan balances grew 2%

Spot deposits at Federal Reserve

Bank increased $5.5 billion

Highlights

% change from:

Category (billions)

4Q14

3Q14

4Q13

Investment securities

$54.2

0%

(5%)

Total commercial lending

$126.4

3%

9%

Total consumer lending

76.5

0%

(2%)

Total loans

$202.9

2%

4%

Interest-earning deposits with

banks

$27.7

25%

165%

Total assets

$339.6

3%

8%

Total deposits

$229.4

2%

6%

Total equity

$46.0

0%

7%

Average Balances

Linked quarter:

Prior Year Quarter:

Average loans grew 4%

Increased average interest-

earning deposits with banks by

165%

Average deposits increased 6%

5

Period-end common shares

outstanding down 5 million

Repurchased 6.1 million common

shares for approximately $500

million during the quarter

(8)

Capital remained strong

Basel III standardized approach

risk-weighted assets increased

$3.7 billion

Strong Capital Position

(1),

(2)

See

Notes

A

and

B

respectively,

in

the

Appendix

for

additional

details.

(3)

December

31,

2014

ratios

estimated.

(4)

See

Estimated

Transitional

Basel

III

and

Pro

forma

Fully

Phased-In

Basel

III

Common

Equity

Tier

1

Capital

Ratios

and

related

information

in

the

Appendix

for

further

details.

(5)

Calculated

using

the

regulatory

capital

methodology

applicable

to

PNC

during

2014.

See

Note

C

in

the

Appendix

for

further

details.

(6)

Calculated

on

a

pro

forma

basis

without

the

benefit

of

the

Basel

III

phase-in

provisions.

For

4Q14,

3Q14

and

4Q13,

the

resulting

pro

forma

fully

phased-in

Basel

III

common

equity

Tier

1

ratios

were

calculated

based

on

standardized

approach

RWAs

and

rules.

(7)

See

Appendix

for

additional

information

related

to

TBV.

(8)

See

Note

3

on

Slide

3.

Highlights

Risk-weighted assets:

Dec. 31,

2014

Sept. 30,

2014

Dec. 31,

2013

Estimated Basel I risk-weighted assets

calculated in accordance with transition

rules for 2014

(1)

$281,379

$277,348

N/A

Estimated

Basel

III

standardized

approach

risk-weighted assets

(2)

$299,360

$295,665

$291,977

Transitional

Basel

III

common

equity

Tier

1

(5)

11.0%

11.1%

N/A

Pro forma fully phased-In Basel III

common

equity

Tier

1

(6)

10.0%

10.1%

9.4%

Linked quarter:

Prior Year Quarter:

Pro forma fully phased-in Basel

III common equity Tier I capital

ratio increased 60 bps

TBV grew 10%

(7)

Tangible book value (TBV):

Dec. 31,

2014

Sept. 30,

2014

Dec. 31,

2013

Tangible

book

value

per

common

share

(7)

$59.88

$59.24

$54.57

Book value per common share

$77.61

$76.71

$72.07

Capital ratios:

(3,4)

(millions)

6

Revenue grew 3% primarily driven

by noninterest income growth

Higher expenses included $128

million

of

specific

elevated

items

(6)

Stable credit costs

Net income grew 2%

Delivered Consistent Profitability and Solid Returns     

Highlights

(1)

Amounts

for

the

2013

period

have

been

updated

to

reflect

the

first

quarter

2014

adoption

of

Accounting

Standards

Update

(ASU)

2014-01

related

to

investments

in

low

income

housing

tax

credits.

(2),(3),(4)

See

Notes

D,

E

and

F,

respectively,

in

the

Appendix

for

additional

details.

(5)

See

Reconcilement

section

of

the

Appendix.

(6)

See

Slide

9.

Linked quarter:

$Change from

$Change from

(millions)

4Q14

3Q14

FY14

FY13

Net interest income

$2,097

($7)

$8,525

($622)

Noninterest income

1,850

113

6,850

(15)

Total revenue

$3,947

$106

$15,375

($637)

Noninterest

expense

(1)

$2,539

$182

$9,488

($193)

Pretax pre-provision

earnings

(2,5)

$1,408

($76)

$5,887

($444)

Provision

52

(3)

273

(370)

Pretax

earnings

(3)

$1,356

($73)

$5,614

($74)

Net income

$1,057

$19

$4,207

($5)

Net income attributable

to diluted common shares

$981

22

$3,918

$2

4Q14

3Q14

FY14

FY13

Returns

ROAA

(4)

1.23%

1.25%

1.28%

1.38%

ROACE

(4)

9.67%

9.52%

9.91%

10.85%

Full Year 2014:

Revenue decreased 4% as a result

of lower NII

Noninterest expense declined 2%

Net income relatively stable  

7

Average interest-earning assets

increased 9%

NII decreased 7% due to decreases

in Core NII and PAA

PAA lower as scheduled accretion

declined

NIM down due to lower loan yields

and liquidity-related actions

Average interest-earning assets

grew 3%

Core NII

(3)

increased 1% as a result

of average commercial loan growth

and higher prepayments which

impacted securities yields

NII declined modestly

–

Lower PAA 

Commercial Loan Growth Drove Higher Linked Quarter

Core NII 

(1)

Core

net

interest

income

(Core

NII)

is

total

net

interest

income

(NII),

as

reported,

less

related

purchase

accounting

accretion

(scheduled

and

excess

cash

recoveries)

(PAA).

See

also

Note

G

in

the

Appendix.

(2)

Core

NIM

is

net

interest

margin

(NIM)

less

(annualized

PAA/average

interest-earning

assets).

See

Reconcilement

section

of

the

Appendix.

(3)

See

Reconcilement

section

of

the

Appendix.

Core NII

(1)

$1,971

$14

$7,942

($362)

Plus purchase

accounting accretion

(PAA)

126

(21)

583

(260)

Total NII

$2,097

($7)

$8,525

($622)

4Q14

3Q14

FY14

FY13

Margins

Net interest margin

(NIM)

2.89%

2.98%

3.08%

3.57%

Core NIM

(2)

2.72%

2.78%

2.88%

3.25%

Highlights

Linked quarter:

$Change

from

$Change

from

(billions)

4Q14

3Q14

FY14

FY13

Average interest-earning

assets

$293.9

$9.0

$283.3

$22.7

(millions)

Full Year 2014:

8

Noninterest income growth of

7% included higher gains on

asset dispositions including a $94

million gain on the sale of PNC’s

Washington, D.C. building

Asset management revenue

declined entirely due to lower

earnings from PNC’s equity

investment in BlackRock

Noninterest income reflected

higher quality revenues due to

fee income growth

Fee

income

increased

4%

(2)

driven by growth in most of our

fee businesses

–

Corporate services grew 17%

–

Asset management up 13%

–

Service charges on deposits

increased 11%

Fee income excluding residential

mortgage grew 10%

(2)

Diverse Businesses Drove Stable Linked Quarter Fee

Income    

Highlights

(1)

Asset

management

includes

the

Asset

Management

Group

(AMG)

and

BlackRock.

(2)

See

Reconcilement

section

of

the

Appendix.

(3)

Total

other

noninterest

income

includes

the

categories

other

income

(including

gains

on

asset

dispositions),

net

gains

(losses)

on

sales

of

securities

and

net-other-than-temporary

impairments.

Linked quarter:

$Change

from

$Change

from

(millions)

4Q14

3Q14

FY14

FY13

Asset

management

(1)

$376

($35)

$1,513

$171

Consumer services

321

1

1,254

1

Corporate services

397

23

1,415

205

Residential mortgage

135

(5)

618

(253)

Service charges on

deposits

180

1

662

65

Fee

income

(2)

$1,409

($15)

$5,462

$189

Total other noninterest   

income

(3)

$441

$128

$1,388

($204)

Total noninterest income

$1,850

$113

$6,850

($15)

4Q14

3Q14

FY14

FY13

Noninterest income to total

revenue

47%

45%

45%

43%

Full Year 2014:

9

Disciplined Expense Management While Investing for

Growth

Noninterest expense grew 8%

Elevated fourth quarter expenses

included $128 million of:

–

PNC Foundation contribution

–

Higher legal and residential

mortgage compliance costs

–

Increased fixed asset write-offs

Highlights

Linked quarter:

(1)

See

Note

H

in

the

Appendix.

(2)

CIP

refers

to

PNC’s

Continuous

Improvement

Program.

(3)

As

required

on

adoption

of

Accounting

Standards

Update

2014-01,

2013

periods

have

been

updated

for

adoption

of

ASU

2014-01.

This

includes

a

reduction

in

noninterest

expense

for

2013

periods.

The

efficiency

ratio

for

the

2013

period

listed

above

has

been

updated

to

reflect

the

adoption

of

this

ASU.

$

Change

from

$

Change

from

(millions)

4Q14

3Q14

FY14

FY13

Personnel

$1,170

($19)

$4,611

($132)

Occupancy

216

16

833

-

Equipment

234

14

859

96

Marketing

67

1

253

7

Other

852

170

2,932

(164)

Total noninterest expense

$2,539

$182

$9,488

($193)

4Q14

3Q14

FY14

FY13

Efficiency

ratio

(1,3)

64%

61%

62%

60%

Full Year 2014:

Noninterest expense decline of 2%

reflected disciplined expense

management and achievement of

CIP

(2)

savings initiatives

10

Overall credit quality

improved

4Q14

3Q14

4Q13

3Q14

4Q13

Nonperforming

loans

(1,2)

$2,510

$2,612

$3,088

(4%)

(19%)

Total

Past

Due

(1,3)

$1,946

$2,006

$2,490

(3%)

(22%)

Net charge-offs

$118

$82

$189

44%

(38%)

Provision

$52

$55

$113

(5%)

(54%)

4Q14

3Q14

4Q13

Loan loss

reserves to total

loans

(4)

1.63%

1.70%

1.84%

Relatively Stable Credit Quality 

Highlights

(millions)

Overall credit quality

remained relatively stable

–

Overall delinquencies

declined

–

Net charge-offs

increased and were

.23% of average

loans

(5)

primarily due to

higher recoveries in

3Q14

–

Provision for credit

losses stable

Maintained appropriate

reserves

% change from:

As

of

quarter

end

except

net

charge-offs

and

provision,

which

are

for

the

quarter.

(1)

Does

not

include

purchased

impaired

loans

or

loans

held

for

sale.

(2)

Does

not

include

foreclosed

and

other

assets.

Excludes

certain

government

insured

or

guaranteed

loans

and

loans

accounted

for

under

the

fair

value

option.

(3)

Includes

loans

that

are

government

guaranteed/insured,

primarily

residential

mortgages.

Past

due

loans

in

this

category

totaled

$1.4

billion

in

4Q14.

(4)

See

Note

I

in

the

Appendix

for

additional

details.

(5)

Net

charge-offs

to

average

loans

for

4Q14

(annualized).

Linked quarter:

Full Year 2014:

11

Outlook

(1)

–

1Q15 vs. 4Q14

(1)

Refer

to

Cautionary

Statement

in

the

Appendix,

including

economic

and

other

assumptions.

Does

not

take

into

account

impact

of

potential

legal

and

regulatory

contingencies.

(2)

Fee

income

refers

to

noninterest

income

in

the

following

categories:

asset

management,

consumer

services,

corporate

services,

residential

mortgage,

and

service

charges

on

deposits.

12

Cautionary Statement Regarding Forward-Looking

Information

This

presentation

includes

“snapshot”

information

about

PNC

used

by

way

of

illustration

and

is

not

intended

as

a

full

business

or

financial

review.

It

should

not

be

viewed

in

isolation

but

rather

in

the

context

of

all

of

the

information

made

available

by

PNC

in

its

SEC

filings.

We

also

make

statements

in

this

presentation,

and

we

may

from

time

to

time

make

other

statements,

regarding

our

outlook

for

earnings,

revenues,

expenses,

capital

and

liquidity

levels

and

ratios,

asset

levels,

asset

quality,

financial

position,

and

other

matters

regarding

or

affecting

PNC

and

its

future

business

and

operations

that

are

forward-looking

statements

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act.

Forward-looking

statements

are

typically

identified

by

words

such

as

“believe,”

“plan,”

“expect,”

“anticipate,”

“see,”

“look,”

“intend,”

“outlook,”

“project,”

“forecast,”

“estimate,”

“goal,”

“will,”

“should”

and

other

similar

words

and

expressions.

Forward-looking

statements

are

subject

to

numerous

assumptions,

risks

and

uncertainties,

which

change

over

time.

Forward-looking

statements

speak

only

as

of

the

date

made.

We

do

not

assume

any

duty

and

do

not

undertake

to

update

forward-looking

statements.

Actual

results

or

future

events

could

differ,

possibly

materially,

from

those

anticipated

in

forward-looking

statements,

as

well

as

from

historical

performance.

Our

forward-looking

statements

are

subject

to

the

following

principal

risks

and

uncertainties.

Our

businesses,

financial

results

and

balance

sheet

values

are

affected

by

business

and

economic

conditions,

including

the

following:

–

Changes

in

interest

rates

and

valuations

in

debt,

equity

and

other

financial

markets.

–

Disruptions

in

the

liquidity

and

other

functioning

of

U.S.

and

global

financial

markets.

–

The

impact

on

financial

markets

and

the

economy

of

any

changes

in

the

credit

ratings

of

U.S.

Treasury

obligations

and

other

U.S.

government-backed

debt,

as

well

as

issues

surrounding

the

levels

of

U.S.

and

European

government

debt

and

concerns

regarding

the

creditworthiness

of

certain

sovereign

governments,

supranationals

and

financial

institutions

in

Europe.

–

Actions

by

the

Federal

Reserve,

U.S.

Treasury

and

other

government

agencies,

including

those

that

impact

money

supply

and

market

interest

rates.

–

Changes

in

customers’,

suppliers’

and

other

counterparties’

performance

and

creditworthiness.

–

Slowing

or

reversal

of

the

current

U.S.

economic

expansion.

–

Continued

residual

effects

of

recessionary

conditions

and

uneven

spread

of

positive

impacts

of

recovery

on

the

economy

and

our

counterparties,

including

adverse

impacts

on

levels

of

unemployment,

loan

utilization

rates,

delinquencies,

defaults

and

counterparty

ability

to

meet

credit

and

other

obligations.

–

Changes

in

customer

preferences

and

behavior,

whether

due

to

changing

business

and

economic

conditions,

legislative

and

regulatory

initiatives,

or

other

factors.

•

Our

forward-looking

financial

statements

are

subject

to

the

risk

that

economic

and

financial

market

conditions

will

be

substantially

different

than

we

are

currently

expecting.

These

statements

are

based

on

our

current

view

that

the

U.S.

economic

expansion

will

speed

up

to

an

above

trend

growth

rate

near

3.3

percent

in

2015,

boosted

by

lower

oil/energy

prices,

and

that

short-term

interest

rates

and

bond

yields

will

rise

only

slowly

in

the

latter

half

of

2015.

These

forward-looking

statements

also

do

not,

unless

otherwise

indicated,

take

into

account

the

impact

of

potential

legal

and

regulatory

contingencies.

13

Cautionary Statement Regarding Forward-Looking

Information (continued)

PNC’s

ability

to

take

certain

capital

actions,

including

paying

dividends

and

any

plans

to

increase

common

stock

dividends,

repurchase

common

stock

under

current

or

future

programs,

or

issue

or

redeem

preferred

stock

or

other

regulatory

capital

instruments,

is

subject

to

the

review

of

such

proposed

actions

by

the

Federal

Reserve

as

part

of

PNC’s

comprehensive

capital

plan

for

the

applicable

period

in

connection

with

the

regulators’

Comprehensive

Capital

Analysis

and

Review

(CCAR)

process

and

to

the

acceptance

of

such

capital

plan

and

non-objection

to

such

capital

actions

by

the

Federal

Reserve.

PNC’s

regulatory

capital

ratios

in

the

future

will

depend

on,

among

other

things,

the

company’s

financial

performance,

the

scope

and

terms

of

final

capital

regulations

then

in

effect

(particularly

those

implementing

the

Basel

Capital

Accords),

and

management

actions

affecting

the

composition

of

PNC’s

balance

sheet.

In

addition,

PNC’s

ability

to

determine,

evaluate

and

forecast

regulatory

capital

ratios,

and

to

take

actions

(such

as

capital

distributions)

based

on

actual

or

forecasted

capital

ratios,

will

be

dependent

at

least

in

part

on

the

development,

validation

and

regulatory

approval

of

related

models.

Legal

and

regulatory

developments

could

have

an

impact

on

our

ability

to

operate

our

businesses,

financial

condition,

results

of

operations,

competitive

position,

reputation,

or

pursuit

of

attractive

acquisition

opportunities.

Reputational

impacts

could

affect

matters

such

as

business

generation

and

retention,

liquidity,

funding,

and

ability

to

attract

and

retain

management.

These

developments

could

include:

–

Changes

resulting

from

legislative

and

regulatory

reforms,

including

major

reform

of

the

regulatory

oversight

structure

of

the

financial

services

industry

and

changes

to

laws

and

regulations

involving

tax,

pension,

bankruptcy,

consumer

protection,

and

other

industry

aspects,

and

changes

in

accounting

policies

and

principles.

We

will

be

impacted

by

extensive

reforms

provided

for

in

the

Dodd-Frank

Wall

Street

Reform

and

Consumer

Protection

Act

(the

“Dodd-Frank

Act”)

and

otherwise

growing

out

of

the

most

recent

financial

crisis,

the

precise

nature,

extent

and

timing

of

which,

and

their

impact

on

us,

remains

uncertain.

–

Changes

to

regulations

governing

bank

capital

and

liquidity

standards,

including

due

to

the

Dodd-Frank

Act

and

to

Basel-related

initiatives.

–

Unfavorable

resolution

of

legal

proceedings

or

other

claims

and

regulatory

and

other

governmental

investigations

or

other

inquiries.

In

addition

to

matters

relating

to

PNC’s

current

and

historical

business

and

activities,

such

matters

may

include

proceedings,

claims,

investigations,

or

inquiries

relating

to

pre-acquisition

business

and

activities

of

acquired

companies,

such

as

National

City.

These

matters

may

result

in

monetary

judgments

or

settlements

or

other

remedies,

including

fines,

penalties,

restitution

or

alterations

in

our

business

practices,

and

in

additional

expenses

and

collateral

costs,

and

may

cause

reputational

harm

to

PNC.

–

Results

of

the

regulatory

examination

and

supervision

process,

including

our

failure

to

satisfy

requirements

of

agreements

with

governmental

agencies.

–

Impact

on

business

and

operating

results

of

any

costs

associated

with

obtaining

rights

in

intellectual

property

claimed

by

others

and

of

adequacy

of

our

intellectual

property

protection

in

general.

14

Cautionary Statement Regarding Forward-Looking

Information (continued)

Business

and

operating

results

are

affected

by

our

ability

to

identify

and

effectively

manage

risks

inherent

in

our

businesses,

including,

where

appropriate,

through

effective

use

of

third-party

insurance,

derivatives,

and

capital

management

techniques,

and

to

meet

evolving

regulatory

capital

and

liquidity

standards.

In

particular,

our

results

currently

depend

on

our

ability

to

manage

elevated

levels

of

impaired

assets.

Business

and

operating

results

also

include

impacts

relating

to

our

equity

interest

in

BlackRock,

Inc.

and

rely

to

a

significant

extent

on

information

provided

to

us

by

BlackRock.

Risks

and

uncertainties

that

could

affect

BlackRock

are

discussed

in

more

detail

by

BlackRock

in

its

SEC

filings.

We

grow

our

business

in

part

by

acquiring

from

time

to

time

other

financial

services

companies,

financial

services

assets

and

related

deposits

and

other

liabilities.

Acquisition

risks

and

uncertainties

include

those

presented

by

the

nature

of

the

business

acquired,

including

in

some

cases

those

associated

with

our

entry

into

new

businesses

or

new

geographic

or

other

markets

and

risks

resulting

from

our

inexperience

in

those

new

areas,

as

well

as

risks

and

uncertainties

related

to

the

acquisition

transactions

themselves,

regulatory

issues,

and

the

integration

of

the

acquired

businesses

into

PNC

after

closing.

Competition

can

have

an

impact

on

customer

acquisition,

growth

and

retention

and

on

credit

spreads

and

product

pricing,

which

can

affect

market

share,

deposits

and

revenues.

Industry

restructuring

in

the

current

environment

could

also

impact

our

business

and

financial

performance

through

changes

in

counterparty

creditworthiness

and

performance

and

in

the

competitive

and

regulatory

landscape.

Our

ability

to

anticipate

and

respond

to

technological

changes

can

also

impact

our

ability

to

respond

to

customer

needs

and

meet

competitive

demands.

Business

and

operating

results

can

also

be

affected

by

widespread

natural

and

other

disasters,

pandemics,

dislocations,

terrorist

activities,

cyberattacks

or

international

hostilities

through

impacts

on

the

economy

and

financial

markets

generally

or

on

us

or

our

counterparties

specifically.

We

provide

greater

detail

regarding

these

as

well

as

other

factors

in

our

2013

Form

10-K

and

our

2014

Form

10-Qs,

including

in

the

Risk

Factors

and

Risk 

Management

sections

and

the

Legal

Proceedings

and

Commitments

and

Guarantees

Notes

of

the

Notes

To

Consolidated

Financial

Statements

in

those

reports,

and

in

our

subsequent

SEC

filings.

Our

forward-looking

statements

may

also

be

subject

to

other

risks

and

uncertainties,

including

those

we

may

discuss

elsewhere

in

this

presentation

or

in

our

SEC

filings,

accessible

on

the

SEC’s

website

at

www.sec.gov

and

on

our

corporate

website

at

www.pnc.com/secfilings.

We

have

included

these

web

addresses

as

inactive

textual

references

only.

Information

on

these

websites

is

not

part

of

this

document.

Any

annualized,

pro

forma,

estimated,

third

party

or

consensus

numbers

in

this

presentation

are

used

for

illustrative

or

comparative

purposes

only

and

may

not

reflect

actual

results.

Any

consensus

earnings

estimates

are

calculated

based

on

the

earnings

projections

made

by

analysts

who

cover

that

company.

The

analysts’

opinions,

estimates

or

forecasts

(and

therefore

the

consensus

earnings

estimates)

are

theirs

alone,

are

not

those

of

PNC

or

its

management,

and

may

not

reflect

PNC’s

or

other

company’s

actual

or

anticipated

results.

15

Notes

Explanatory Notes

(A) Includes credit and market risk-weighted assets.

(B) Basel III standardized approach risk-weighted assets were estimated based on the Basel III standardized approach rules and

include credit and market risk-weighted assets.

(I) The allowance for loan and lease losses includes impairment reserves attributable to purchased impaired loans.

(G) PNC believes that core net interest income, a non-GAAP financial measure, is useful in evaluating the performance of our

interest-based activities.

(C) Transitional Basel III common equity Tier 1 capital ratio is common equity Tier 1 capital (using the definitions of, and deductions

from, capital under Basel III, as such definitions and deductions are phased-in for 2014) divided by period-end Basel I risk-

weighted assets with 2014 transition adjustments as defined by the Basel III rules.

(E) Pretax earnings is income before income taxes and noncontrolling interests.

(H) Efficiency ratio calculated as noninterest expense divided by total revenue.

(D) Pretax pre-provision earnings is defined as total revenue less noninterest expense. We believe that pretax pre-provision

earnings, a non-GAAP financial measure, is useful as a tool to help evaluate the ability to provide for credit costs through

operations.

(F) ROAA is Return on Average Assets and ROACE is Return on Average Common Shareholders' Equity.

16

Estimated

Transitional

Basel

III

and

Pro

forma

Fully

Phased-

In

Basel

III

Common

Equity

Tier

1

Capital

Ratios

As a result of the staggered effective dates of the final U.S. capital rules issued in July 2013, as well as the

fact that PNC remains in the parallel run qualification phase for the advanced approaches, PNC’s regulatory

risk-based capital ratios in 2014 are based on the definitions of, and deductions from, capital under Basel

III (as such definitions and deductions are phased-in for 2014) and Basel I risk-weighted assets (but

subject to certain adjustments as defined by the Basel III rules). We refer to the capital ratios calculated

using these Basel III phased-in provisions and Basel I risk-weighted assets as the Transitional Basel III

ratios. These capital ratios became effective for PNC on January 1, 2014.

We provide information on the next slide regarding PNC’s estimated Transitional Basel III

common equity Tier 1 ratio and PNC’s estimated pro forma fully phased-in Basel III common

equity Tier 1 ratio. We previously referred to the Basel III common equity Tier 1 ratio as the

Basel III Tier 1 common ratio. In addition, on the next slide we provide information regarding

PNC’s Basel I Tier 1 common capital ratio during 2013, which was applicable to PNC through

2013 under the U.S. regulatory capital rules.

Common equity Tier 1 capital as defined under the Basel III rules adopted by the U.S. banking

agencies differs materially from Basel I Tier 1 common capital. For example, under Basel III,

significant common stock investments in unconsolidated financial institutions, mortgage servicing

rights and deferred tax assets must be deducted from capital to the extent they individually

exceed 10%, or in the aggregate exceed 15%, of the institution’s adjusted common equity Tier 1

capital. Also, Basel I regulatory capital excludes accumulated other comprehensive income

related to securities currently and previously held as available for sale, as well as pension and

other postretirement plans, whereas under Basel III these items are a component of PNC's

capital.

17

Estimated

Transitional

Basel

III

and

Pro

forma

Fully

Phased-

In

Basel

III

Common

Equity

Tier

1

Capital

Ratios

  Transitional Basel III

  Pro forma Fully Phased-In Basel III

Dollars in millions

December 31, 2014

September 30, 2014

December 31, 2014

September 30, 2014

December 31, 2013(a)

Common stock, related surplus, and retained earnings, net of treasury stock

$40,102

$39,808

$40,102

$39,808

$38,031

Less regulatory capital adjustments:

Goodwill and disallowed intangibles, net of deferred tax liabilities

(8,939)

(8,914)

(9,276)

(9,234)

(9,321)

Basel III total threshold deductions

(217)

(214)

(1,085)

(1,067)

(1,386)

Accumulated other comprehensive income (b)

(9)

100

153

501

196

All other adjustments (c)

(15)

(28)

(77)

(93)

(64)

Estimated Basel III Common equity Tier 1 capital

30,922

$                      

30,752

$              

29,817

$                 

29,915

$              

27,456

$            

Estimated Basel I risk-weighted assets calculated in accordance with transition rules

for 2014 (d)

281,379

$                    

277,348

$            

N/A

N/A

N/A

Estimated Basel III standardized approach risk-weighted assets (e)

N/A

N/A

299,360

$              

295,665

$            

291,977

$           

Estimated Basel III advanced approaches risk-weighted assets (f)

N/A

N/A

286,450

$              

289,405

$            

290,080

$           

Estimated Basel III Common equity Tier 1 capital ratio

11.0%

11.1%

10.0%

10.1%

9.4%

Risk-weight and associated rules utilized

Basel I (with 2014

transition

adjustments)

Basel I (with 2014

transition

adjustments)

Standardized

Standardized

Standardized

(a) Amounts have not been updated to reflect the first quarter 2014 adoption of ASU 2014-01 related to investments in low income housing tax credits.

(b) Represents net adjustments related to accumulated other comprehensive income for securities currently and previously held as available for sale, as well as

pension and other postretirement plans.

(c) Includes adjustments as required based on whether the standardized approach or advanced approaches is utilized.

(d) Includes credit and market risk-weighted assets.

(e) Basel III standardized approach risk-weighted assets were estimated based on the Basel III standardized approach rules and include credit and market risk-weighted assets.

(f) Basel III advanced approaches risk-weighted assets were estimated based on the Basel III advanced approaches rules, and include credit, market and operational risk-weighted assets.

2013 Basel I Tier 1 Common Capital Ratios (a) (b)

Dollars in millions

Dec. 31, 2013

Basel I Tier 1 common capital

$28,484

Basel I risk-weighted assets

272,169

Basel I Tier 1 common capital ratio

10.5%

(a) Effective January 1, 2014, the Basel I Tier 1 common capital ratio no longer applies to PNC (except for stress testing purposes). Our 2013 Form 10-K

included additional information regarding our Basel I capital ratios.

PNC utilizes the pro forma fully phased-in Basel III capital ratios to assess its capital position (without the benefit of phase-ins), including comparison to similar estimates made by other financial

institutions. Our Basel III capital ratios and estimates may be impacted by additional regulatory guidance or analysis, and in the case of those ratios calculated using the advanced approaches, the

ongoing evolution, validation and regulatory approval of PNC’s models integral to the calculation of advanced approaches risk-weighted assets.

(b) Amounts have not been updated to reflect the first quarter 2014 adoption of ASU 2014-01 related to investments in low income housing tax credits.

18

Tangible Book Value per Common Share

%Change

Tangible Book Value per Common Share Ratio

12/31/14 vs.

9/30/14

12/31/14 vs.

12/31/13

Dollars in millions, except per share data

Dec. 31, 2014

Sept. 30, 2014

Dec. 31, 2013

Book value per common share (a)

77.61

$       

76.71

$        

72.07

$       

1%

8%

Tangible book value per common share

Common shareholders' equity (a)

40,605

$      

40,536

$       

38,392

$      

Goodwill and Other Intangible Assets (b)

(9,595)

(9,559)

(9,654)

Deferred tax liabilities on Goodwill and Other Intangible Assets (b)

320

325

333

Tangible common shareholders' equity

31,330

$      

31,302

$       

29,071

$      

Period-end common shares outstanding (in millions)

523

528

533

Tangible book value per common share (Non-GAAP)

59.88

$       

59.24

$        

54.57

$       

1%

10%

Tangible book value per common share is a non-GAAP financial measure and is calculated based on tangible common

shareholders’ equity divided by period-end common shares outstanding. We believe this non-GAAP financial measure serves

as a useful tool to help evaluate the strength and discipline of a company's capital management strategies and as an

additional, conservative measure of total company value.

(a) Amounts for the 2013 period have been updated to reflect the first quarter 2014 adoption of Accounting Standards

Update (ASU) 2014-01 related to investments in low income housing tax credits.

(b) Excludes the impact from mortgage servicing rights of $1.4 billion at December 31, 2014, $1.5 billion at September 30,

2014 and $1.6 billion at December 31, 2013.

19

Non-GAAP to GAAP Reconcilement

$ in millions

Dec. 31, 2014

Sept. 30, 2014

Dec. 31, 2014

Dec. 31, 2013

Net interest margin, as reported

2.89%

2.98%

3.08%

3.57%

Purchase accounting accretion (1)

$126

$147

$583

$843

Purchase accounting accretion, if annualized

$500

$583

$583

$843

Avg. interest earning assets

$293,905

$284,951

$283,305

$260,645

Annualized purchase accounting accretion/Avg. interest-earning assets

0.17%

0.20%

0.20%

0.32%

Core net interest margin (2)

2.72%

2.78%

2.88%

3.25%

For the three months ended

For the year ended

(1) Purchase accounting accretion is scheduled purchase accounting accretion plus excess cash recoveries.

(2) PNC believes that core net interest margin, a non-GAAP financial measure, is useful as a tool to help evaluate the impact of purchase

accounting accretion on net interest margin.  The adjustment represents annualized purchase accounting accretion divided by average interest-

earning assets.

$ in millions

Dec. 31, 2014

Sept. 30, 2014

% Change

Dec. 31, 2014

Dec. 31, 2013

% Change

Net Interest Income

Core net interest income (a)

$1,971

$1,957

1%

$7,942

$8,304

-4%

Total purchase accounting accretion

Scheduled accretion net of contractual interest

94

116

-19%

456

728

-37%

Excess cash recoveries

32

31

3%

127

115

10%

Total purchase accounting accretion

126

147

-14%

583

843

-31%

Total net interest income

$2,097

$2,104

0%

$8,525

$9,147

-7%

For the three months ended

(a) We believe that core net interest income, a non-GAAP financial measure, is useful in evaluating the performance of our interest-based activities.

For the year ended

20

Non-GAAP to GAAP Reconcilement

For the three months ended

$ in millions

Dec. 31, 2014

Sept. 30, 2014

% change

Dec. 31, 2014

Dec. 31, 2013

% Change

   Net interest income

$2,097

$2,104

0%

$8,525

$9,147

-7%

   Noninterest income

$1,850

$1,737

7%

$6,850

$6,865

0%

Total revenue

$3,947

$3,841

3%

$15,375

$16,012

-4%

Noninterest expense (1)

($2,539)

($2,357)

8%

($9,488)

($9,681)

-2%

Pretax pre-provision earnings (2)

$1,408

$1,484

-5%

$5,887

$6,331

-7%

Net income (1)

$1,057

$1,038

2%

$4,207

$4,212

0%

(1) Amounts for 2013 period have been updated to reflect the first quarter 2014 adoption of Accounting Standards Update

(ASU) 2014-1 related to investments in low income housing tax credits.

(2) PNC believes that pretax, pre-provision earnings, a non-GAAP financial measure, is useful as a tool to help evaluate the

ability to provide for credit costs through operations.

For

the year ended

For the three months ended

$ in millions

Dec. 31, 2014

Sept. 30, 2014

% change

Dec. 31, 2014

Dec. 31, 2013

% change

Asset management

$376

$411

$1,513

$1,342

Consumer services

$321

$320

$1,254

$1,253

Corporate services

$397

$374

$1,415

$1,210

Residential mortgage

$135

$140

$618

$871

Service charges on deposits

$180

$179

$662

$597

Total fee income

$1,409

$1,424

-1%

$5,462

$5,273

4%

Residential mortgage

$135

$140

$618

$871

$1,274

$1,284

-1%

$4,844

$4,402

10%

Net gains on sales of securities

$0

$0

$4

$99

Net other-than-temporary impairments

($7)

($1)

($11)

($16)

Other

$448

$314

$1,395

$1,509

   Total noninterest income, as reported

$1,850

$1,737

7%

$6,850

$6,865

0%

For the year ended

Fee income, adjusted for residential mortgage